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Revenue Questions


wealthymattersThis post is in continuation of these 2:Link.Link.

This post is on how to analyse the key revenue constituents of a profit and loss statement (P&L).

Some companies report the ‘total income’ earned by them within a year as ‘sales’. As an investor,its better for us if we take a company’s integral earnings or core operations only as sales and not the income that is generated from other operations. The latter could include items such income from sale of scrap, income from interest and dividends, forex gains, profit on sale of assets, export incentives and miscellaneous receipts, amongst others.While these items may not be a significant part of the total income, it is still a good practice to follow. In fact, it would be even better if we could further bifurcate such earnings under two heads – other operating income and other income. Details regarding total income are found in respective schedules.

Revenues are generated from sales of goods or services. For companies which have a presence in various businesses, it is a good practice idea to track the change in segment wise/ product wise / business wise revenues on a year on year basis. Look at how the income from each business segment (as a percentage of net sales) has changed over the years. This will give us a good idea how a company’s segments or businesses have been performing over a particular time frame. Read more of this post

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Alok Kejriwal On Marwari Business Traits


The Marwaris are so successful at business,so it makes sense to learn from them.In the article below Alok Kejriwal of contests2win.com writes about what he learnt from his family business.

The Seven Subjects I learnt at Marwari Business School (MBS)

On the last day of my ICSE exam (10th standard finals), my Nani (Grand mother) offered me a free seat into the Marwari Business School. I was 16 and I had the opportunity to go and sit in my Nana’s (Grand father) office.

I took up the offer.

These are the seven subjects I learnt:

M = Monetization Mentality

wealthymatters.com

Monetization above everything else!

For Marwari’s, money pretty much means everything. It’s the ‘currency’ of success – pun intended. People are sized and measured not by their waist sizes but by the width of their balance sheet. A Marwari’s religion is making money and they meditate on it.

What Monetization and its terms means is also unique for Marwari’s.

For instance, I learnt that Revenue was not what you ‘bill’ or ‘pass-thru’ or ‘recognize’. Revenue was always what you ‘net-net’ earned that came in your coffers.

Revenue is bottom line for a Marwari – not top line. Read more of this post

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